Global Market News Apple, Amazon, Eurozone GDP rate, Biden and Xi, OPEC+

Global Market News. Positive updates from tech giants such as Amazon and Apple are expected to support US stock markets at the open, while the Eurozone's stronger-than-expected GDP in the second quarter also supported risk sentiment. President Biden and Xi's talks were constructive, while next week is the OPEC+ meeting.

Tech earnings reports continue to roll in with Amazon and Apple

Earnings reports from the big Tech stocks continue to roll in, with Amazon (AMZN) and Apple (AAPL) both beating expectations for the quarter. The second quarter was a rough one for Amazon, which saw net sales in North America rise 10% in the just-ended quarter, up from 22% in the same period a year ago. Its international unit was actually down 12%. The outlook, however, was still impressive. Amazon said it expects third-quarter revenue to increase thanks to its Prime subscription fee hike in an environment where consumer demand is still strong. Earlier in the week, Walmart (WMT) said it would post lower-than-expected revenue this year as rising prices weighed on US consumers' discretionary spending. Apple also predicted strong demand for its iPhone product, even as consumers cut back on other spending as economic growth slows. Apple did not provide specific revenue guidance, citing economic uncertainty, but said that annual sales in the current quarter could grow faster than the 2% growth it posted last quarter - something that should not be discounted in the current climate.

Biden and Xi relax their relationship

US President Joe Biden and Chinese leader Xi Jinping spoke on the phone for more than two hours on Thursday, signaling that while relations between the two economies are still frosty, the ice is beginning to thaw. The most important topic of discussion was Taiwan, and the lack of triggers showed that both sides did not want a new political crisis as they grapple with economic problems at home. Other topics of conversation included Russia's war in Ukraine and the possibility of cooperation between the US and China in areas such as climate change, a senior US official told reporters briefly.

Stock markets to open higher in a positive week

Following strong reports from Amazon and Apple, US stock markets are set to open higher, capping a positive week. The Dow Jones is up 75 points, while the S&P 500 is up 0.7% and the Nasdaq 100 is up 1.1%. The main indices are on track to close positive for the second week in a row. Despite the Fed raising rates by 75 basis points this week and GDP shrinking for the second consecutive quarter, generally strong corporate earnings supported sentiment.   The Dow Jones Industrial Average is up 2% so far this week, while the S&P 500 and Nasdaq Composite have gained 2.8%. However, earnings reports were not all about strong results; Intel's (INTC) quarterly results fell short of expectations, while Roku's (ROKU) shares took a hit after it warned of stagnation in the advertising space. Friday will see reports from Chevron (CVX), Exxon Mobil (XOM), AstraZeneca (AZN) and Procter & Gamble (PG) as well as the Fed's preferred measure of inflation, the personal consumption expenditure index, personal income and personal spending data.

Eurozone's GDP rate surprises on the upside

The Eurozone posted surprisingly strong growth in the second quarter, beating recession expectations, thanks to solid performances in Spain, France and Italy. The region's GDP in the April-June quarter rose by 0.7% qoq and 4.0% yoy. Expectations were for quarterly growth of 0.2% and annualized growth of 3.4%. This growth was largely thanks to France beating expectations with 0.5% q-o-q growth, Italy with 1.0% and Spain with 1.1%. The news is very good but these are preliminary estimates that could be revised later and growth in Germany, the region's largest economy, has officially stalled in the second quarter. Earlier this week, J.P. Morgan said it thinks the region's GDP will contract by 0.5% in both the fourth quarter of this year and the first quarter of next year, forecasting that the Eurozone will technically enter recession early next year.

Oil rises, eyes on OPEC+ meeting

Crude oil traded higher ahead of next week's OPEC+ meeting amid global recession fears. News that the US economy contracted in the second quarter also had a negative impact on the crude oil market on Thursday, pointing to reduced demand in the country. However, this weak sentiment did not last long as eyes turned to next week's meeting. Members are leaving the record supply cut of 9.7 million barrels per day under the production cut agreement they agreed in April 2020, when the pandemic killed demand. US President Joe Biden visited Saudi Arabia last month hoping for an agreement to increase production, but it may be very difficult for most member countries, which cannot meet current production quotas due to underinvestment, to make significant increases in production. Crude oil rose 2.1% to $98.42 while Brent rose 2.1% to $103.96.